AOL Time Warner has made further inroads into China's heavily protected media sector following last month's ground-breaking deal to broadcast cable-television channels in southern China. With its Chinese partner, AOL has launched a US$60 million investment company to make media-related investments in China, it was revealed yesterday. The partner is Shanghai Industrial Holdings, an SAR-listed vehicle controlled by the Shanghai municipal government. Shanghai Industrial chief executive Zhuo Fumin said the US-based media giant recently invested US$20 million for one-third of the joint venture, called Compass, which will focus mainly on investing in media-related projects. The red chip took the remaining stake in Compass for US$40 million, Mr Zhuo said. Compass has already made its first investment, taking a stake of about 10 per cent in mainland-based advertising company Clear Media. Mr Zhuo said the advertising firm, which has a 70 per cent share of the outdoor advertising market throughout China's coastal cities, plans to seek a listing on Hong Kong's main board soon. Goldman Sachs was advising on the listing but he gave no further details about Clear Media or the investment by Compass. Mr Zhuo said Compass would continue to invest in the mainland media industry but would not venture into sensitive areas such as cable television. AOL last month became the first foreign broadcaster to be granted the right to broadcast cable-television channels in China's Guangdong province. Mr Zhuo said the Compass investment had further bolstered Shanghai Industrial's focus on the information and technology sector. 'We have invested more than US$300 million in the IT business, including the Compass project,' he said. Shanghai Industrial is committed to expanding its infrastructure, logistics and IT business in the next five years. Management said IT investments were expected to account for 30 per cent of profits by 2004. Major IT investments include US$183 million in Semiconductor Manufacturing International, a key project in Shanghai's Zhangjian High Technology Park. The project is expected to make a profit next year. In line with its strategy of spinning off subsidiaries or associates for separate mainland listings, Mr Zhuo said the firm would seek listings for its consumer products and retailing businesses - including Shanghai Bright Dairy & Food and Oriental Shopping Centre. Despite gloomy stock-market sentiment in the mainland, Mr Zhuo said he was confident Shanghai Bright Dairy & Food would be listed in Shanghai by the end of this year or early next. Bright Dairy & Food is 40 per cent owned by Shanghai Industrial and is the mainland's largest dairy-product manufacturing and sales enterprise. Meanwhile, Mr Zhuo, an executive director of Shanghai Industrial's parent Shanghai Industrial Investment (Holdings) (SIIH), said SIIH would use its recently acquired 73.28 per cent stake in a mainland-listed steel company as a vehicle to develop its property investments.